HK welcomes secondary listings

Regulators expect to lure US-listed assets back

The chief executive of Hong Kong’s stock exchange said overseas-listed Chinese mainland firms were welcome to tap the territory’s market for funds while waiting for the Chinese mainland to implement its own secondary listings plan.

Hong Kong’s exchange is competing with mainland bourses in Shanghai and Shenzhen to lure the likes of US-listed Baidu Inc, Alibaba Group Holding Ltd and JD.com Inc back to Asia via secondary listings.

To that end, Hong Kong this year eased rules on dual-class and secondary listings, and permitted listings from pre-revenue biotech firms.

Regulators in Beijing established Chinese depositary receipts (CDRs) to provide an “institutional foundation” for innovative firms to get listed.

So far, no firm has issued CDRs, whereas NASDAQ-listed BeiGene will be the first to list under Hong Kong’s new secondary listing rules on August 8.

The first biotech listing under new rules was that of Ascletis Pharma Inc on Wednesday.

“If many companies have funding needs before CDR happens, they can come to Hong Kong,” Charles Li, chief executive of bourse operator Hong Kong Exchanges and Clearing Ltd (HKEX), said at Ascletis’ listing ceremony

Li said he did not know the details of CDR development, and that an institutional innovation of that size would take time.

Some Chinese firms have said they are discussing CDRs with the mainland regulators, but none have proposed any concrete listing plans.

On Tuesday, a Baidu spokeswoman reiterated the internet search firm had considered offering CDRs but had no time table. An Alibaba spokeswoman reiterated the e-commerce firm would actively explore CDR possibilities.

Hong Kong’s rule changes came after Alibaba chose New York for its record $25 billion 2014 IPO. The bourse’s one-share-one-vote principle had led it to reject the firm’s plan for a self-selecting group of managers to control most of the board.